George Palumbo

Determinants of Municipal Bond Ratings for General-Purpose Governments: An Empirical Analysis

In the wake of the destabilization of the tax-exempt bond insurance industry, this paper presents an ordered probit model of the determinants of the credit ratings of 965 county and city governments from throughout the nation. The underlying Moodys rating of these governments is posited as a function of a vector of publicly available economic, demographic, governmental, fiscal, and financial variables. The empirical results demonstrate the relative importance of economic base diversity, the growth rates of earnings, and population as well as existing full faith and credit debt on credit ratings. Additionally, our findings support the proposition that the existence of tax limits reduce the perception of credit quality, while expenditure limits raise credit ratings.

Life-Time Earnings by Age and Level of Education Web Appendix

Life-time earnings patterns of individuals are an important consideration in forecasting future earnings of individuals who have losses due to personal injury or death as well as valuing the enhanced earnings due to licenses and education obtained during a marriage. This paper provides fresh evidence of how earnings change over an individual’s life based on their educational level and whether these earnings have kept pace with inflation. In addition it provides some limited evidence on the issue of the stability of the age-earnings patterns over time and the possible effects of different data samples on the conclusions of previous studies.